Markets Move Lower, Down 1%

The Indian markets are gradually going lower, currently trading over 1% lower than their opening today. All of the 13 sectors are trading in the red, with Metals, Real Estate, Auto, Power, etc. witnessing consistent selling. All the sectoral indices are down in the range of 0.34%-2.76%.

The banking index is lower by 1% following the recent recommendation of the RBI regarding tighten regulations on loan restructuring, including regulatory forbearance for restructured assets, forbidding banks from converting debt to equity with a cap of 10%, seeking higher compromise from promoters. The three largest lenders, SBI, ICICI Bank and HDFC Bank are trading lower by 1.57%, 2.17% and 1% respectively.

Metals have been under the most pressure among the sectoral indices, with Sterlite Industries, Sesa Goa, Jindal Steel, Hindalco and Tata Steel all declining between 2.80%-4.19%. Industrial metals have been under pressure because of international conditions affecting the demand. A strong dollar coupled with weak economic data is likely to add to the price pressures for metals.

While UltraTech Cement came out with a good set of results, JP Morgan downgraded the company's outlook from neutral to underweight on the basis of valuations. Nevertheless, the stock is trading significantly higher on the back of the results announcement on Friday, Jul 20.

Along with equity witnessing a downside, the rupee too fell by 50 paise to 55.82 against the USD.

The peer Asian markets too have not seen an improvement through their respective trading sessions, and have sunk below the levels seen earlier today. The Nikkei and Shanghai Composite closed lower by 1.86% and 1.26% respectively. Hang Seng is also trading lower than what was seen in the morning, shrinking by 2.80% to touch 19090.

European markets have opened in the red due to the proliferating economic concerns. UK’s FTSE 100, France CAC40 and Germany’s Dax30 all opened lower by around 1%, and the Spanish index of IBEX 35 opened further down by 1.9%. This de-growth is expected to deepen along the trading hours. On the currency front, the Euro has taken a massive hit due to the Spanish issue, trading below the 1.21 level against the USD, which is about 0.19% lower today.

Due to the lower opening of the European markets, no improvement is expected in the local markets. The Sensex and Nifty would continue trading in losses over the day.